- Menzgold has defied a directive from the Securities and Exchange Commission to stop trading in gold collectibles for operating without a licence
- According to lawyers of the company, the "purported directive to shut down or suspend its operations untenable and is unable to comply"
Management of gold dealership company Menzgold Ghana are reluctant to shut down their trading activities despite a directive from the Securities and Exchange Commission (SEC).
Menzgold has been in the news in recent weeks following disagreements with the Bank of Ghana (BoG) regarding its operations.
However, the issue took another twist on Wednesday following a directive from SEC to have the company shut down its gold trading activities.
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The gold dealership firm, though, has refused to follow SEC’s directive, describing the body’s approach as “unfortunate” and “unhealthy”.
Menzgold, through its lawyers, says the directive to shut down or suspend its operations is untenable and therefore makes the company unable to comply with the terms of SEC.
The company’s response was issued by law firm Kwame Akuffo & Co Unlimited, who serve as its representative.
“We therefore find it unfortunate, that without waiting for the said time to lapse, nor giving our Client any notice whatsoever, but in an unhealthy overreach, you sent to our Client a letter with a heading which states "Notice to Suspend Trading without Licence". While the heading of the said letter indicates a purported suspension of trading without a licence, the content, however, speaks of a direction that our Client's business should be shut down. The contradictions in your directive are for you to resolve, and it makes your intentions difficult for our Client to understand or comply with,” sections of a letter from the lawyers of Menzgold read.
“Be that as it may, we are instructed to respectfully inform you that our Client's business module which is essentially that of the sale of gold collectibles is not one that falls within your regulatory regime. Please be informed that our Client is not issuing any "tradable Note" as you erroneously state in your letter of 7th September, 2018!
“Our Client is willing to respond to the queries raised in your letter of 27th August 2018, and would like to respectfully request that you furnish it with the provisions of the Securities and Industries Law that its business and objects fit into and what it requires for the purposes of a License if any. This request is without prejudice to the rights of our Client.
“Again, our Client reiterates that it is not engaged in Capital Market activities, and neither does it issue gold-backed depository notes.
“Under the circumstances, we are instructed to inform you that our Client finds your purported directive to shut down or suspend its operations untenable and is unable to comply with the terms of your letter dated 7th September, 2018 especially considering the contagion and the effect on the market and its Customers,” it added.
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